Audits are big business for insurance carriers. For every 2 dollars that insurance companies spend on investigations, they profit $17 dollars in recoveries. In fact, audit and investigation divisions are one of the most profitable divisions for insurance companies.
Even though this doesn’t mean insurance carriers are out to get you, studies show that chiropractors have one of, if not the highest error rate when it comes to documentation.
In other words, insurance companies know chiropractors are bad at documentation and it’s easier to get money from them.
In general, chiropractors assume that as long as insurance carriers and Medicare are paying, they must be billing correctly. This is a very dangerous assumption to make.
Both insurance companies and Medicare collect information on all providers to identify those who fall outside the accepted parameters.
If your claims are coded improperly, you will be held responsible and required to pay back all the payments you received and possibly an additional fine.
The average payout by a practice seeing an average of 70 patient visits per week is $40,000.00 and $800,000.00 in an office seeing an average of 350 patients visits per week.
Because audits can be conducted on any provider that receives payments, and that includes cash practices as well, you can be audited. It’s not a question of if you’ll get audited; it’s a question of when you’ll get audited.
What Triggers an Audit?
Audits can be triggered in several ways, but the two most common are complaints and profiling.
As an example, a doctor contacted me recently for consulting services because a patient submitted a complaint to the board of chiropractic. The board requested the patient’s record for review. Because his documentation was so poor, the board requested five more files to be reviewed by the Department of Healthcare Quality Assurance.
Concerned, he called my office to review the files before submitting them to the board. Unfortunately, his documentation did not support his billing and without going into detail because I’m now working with his attorney, he is facing fines up to $10,000 dollars, the loss of his license, and possible referral for criminal prosecution.
With profiling, insurance companies gather information from claims submissions and then use the information to profile your billing patterns. If your office falls outside accepted parameters, then you get picked out for an audit.
Usually it starts with a request to review a certain number of patient files. Then the auditor reviews the files to determine if your records support the services that you received payment for.
If the records can’t prove the medical necessity of your treatment or support the billing codes, then the auditor will calculate a “percent deficiency,” and then extrapolate that over all the claims paid to you for the past five years.
That will then determine your payback amount and the insurance company sends you a letter demanding you pay them back.
As an example, a doctor called Compliance & Auditing Services for help when he received a request for $400,000 dollars.
Medicare audits can be triggered by a complaint, profiling or even randomly. Medicare has a policy requiring them to randomly audit doctors’ offices.
The worst-case scenario is to have criminal charges filed against you.
Specific triggers include:
- Billing for maintenance care
- Overusing CMT code 98941(3-4 regions) or 98942 (5 regions).
*Payers consider the correct percentage of utilization by chiropractors for CMT codes is:
98940–25%, 98941–60%, 98942–15%*
- Excessive use of the E/M codes 99204 and 99205.
- Billing massage therapy (97124) with a CMT 98941 or 98942.
- Billing manual therapy (97140) with a CMT 98941 or 98942.
- Repeatedly billing neuromuscular re-education (97112).
- Billing passive therapies beyond the first 12 visits of care.
Being audited doesn’t mean you are guilty, it means you have to prove that you are innocent. So be able to justify your treatment with accurate documentation and evidence-based research.
Take the first steps now, before you get audited, by taking the time to improve your documentation and billing polices.
Start implementing active rehabilitation directed at the improvement of function rather than symptom relief. Most importantly, take compliance seriously.
Though there’s no way to completely avoid an audit, performing internal audits and having a comprehensive compliance program in your office can flag potential problems in billing or coding and avoid costly mistakes.
In fact, federal regulation requires you to do regular audits and to have a documented compliance program in your office.
Signed into law by the Health Care and Education Reconciliation Act of 2010, having an active office compliance program is mandatory. So you don’t have a choice, it’s the law.
Compliance programs must be updated regularly and followed to the letter.
If you haven’t completed an internal audit or developed a comprehensive compliance program, now is the time. Both can be done by outside consultants, or done in-house.
For example, all Compliance & Auditing Services consultants are certified as medical compliance specialists, insurance consultants and certified peer reviewers. Our company can design a compliance program that meets all federal and state regulations for you from scratch and conduct the required internal audits.
So why struggle to be compliant alone when there’s a team of qualified experts ready to give you the personal support you need to protect your office from losing 1000s of dollars to audits.
These are trying times for all doctors and ignoring the new regulations is no longer an option.
Dr. John Davenport DCM, CCSP, FIAMA, MCSP, ICI
Chief Compliance Officer Compliance & Auditing Services
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